The International Energy Agency's (IEA) Oil and Gas Industry in Energy Transitions report, launched at WEF's Annual Meeting in Davos on 21 January, highlights the significant role the industry can play in tackling climate change through its engineering capabilities, financial resources and project management expertise.
As the landscape of the oil and gas industry is diverse, there is no single strategic response but a variety of approaches depending on each company's circumstances.
The report calls for oil companies to reduce the environmental footprint of their operations, with managing methane leaks identified as the single most important and cost-effective measure to bring down emissions.
Oil and gas organisations can also make a significant impact on climate change by using their technical expertise to support the development of low carbon fuels, renewable energy sources and decarbonisation technologies.
'With their extensive know-how and deep pockets, oil and gas companies can play a crucial role in accelerating deployment of key renewable options such as offshore wind, while also enabling some key capital-intensive clean energy technologies - such as carbon capture, utilisation and storage and hydrogen - to reach maturity,' said IEA Executive Director Dr Fatih Birol.
Crucially, the report demonstrates that investment in oil and gas projects will still be needed, even in a rapid energy transition scenario. If investment in existing oil and gas fields were to stop completely, the decline in output would be around 8% per year. This is larger than any plausible fall in global demand, so investment in existing fields and some new ones will be necessary to provide the energy needed by a growing global population.
Commenting on the IEA report, Ipieca Executive Director Brian Sullivan said, 'As the report makes clear, the complexity of the energy transition means that all stakeholders, including the oil and gas industry, have vital contributions to make if emissions are to eventually decline to net-zero while also providing the world with access to safe, clean and affordable energy. Ipieca's unique position enables its members to support the energy transition and contribute to sustainable development.'
To read the Oil and Gas Industry in Energy Transitions report, please click here.
Ipieca's guidance on emissions management including methane can be found here.